Farmers have been advised to look for opportunties as the market settles downwards
Farmers need to watch for opportunities as feed markets settle downwards, according to KW senior trader Chris Davidson.
It follows new of a far larger than expected Russian wheat crop which caused an immediate price dip.
Mr Davidson said: “From a peak of around £145/t, UK wheat futures fell even lower than the current £138/t, and in the near term the downward pressure on prices could remain.
“But UK prices will tend to remain firmer than elsewhere. With both bioethanol plants running, domestic supply and demand are finely balanced, and the weakening value of Sterling is making imports less attractive.”
He added despite the price drop many alternative energy feeds offered better value than rolled wheat, with confectionery and breakfast cereal blends offering 6-13 per cent more energy for a similar price and molasses-based liquid feed prices dropping due to higher sugar production.
For protein feeds, Mr Davidson said the focus was on the North American soyabean harvest which was now underway with growing worldwide soyabean stocks putting downward pressure on prices.
Rapemeal prices were also dropping with crushers forced to clear unsold stocks and British wheat distillers’ feed continues to remain competitive.
Mr Davidson advised farmers to secure remaining winter requirements and stocks for next summer in any dips as US harvest progressed.
“Anything below £290/t for summer 2018 soyabean meal is a historically low price regardless of where the market goes to from here.”
He also recommended checking winter cover for protected fats as prices were expected to firm over the coming months as the seasonal peak in palm oil production comes to an end.
With many of the main milk supply contracts increasingly weighted towards butterfat content, high C-16 fats were a priority for many.
“We are also seeing interest in more sustainable alternatives that achieve the same effect as protected fats by enhancing digestion and driving intakes,” he added.
“Used weight-for-weight to reduce protected fat in the diet by half without any effect on performance, the cost can be £100-400/t less depending on the type of fat replaced.”